The former chairman of the Revenue Commissioners, Séamus Paircéir, became a tax consultant to Ben Dunne after leaving office in 1987 and in the wake of leading the Revenue's dealings with Mr Dunne and the Dunne family trust.
While still in office Mr Paircéir met Mr Dunne and discussed a possible settlement in relation to one of the largest tax bills raised during his period in office.
The first of a number of meetings between Mr Paircéir and Mr Dunne was set up following intervention by the taoiseach, Charles Haughey, the Moriarty tribunal heard yesterday. At the time Mr Haughey was receiving money from Mr Dunne.
In an opening statement Ms Jacqueline O'Brien SC, for the tribunal, said Mr Paircéir was paid £10,000 plus VAT in 1988 for tax consultancy services given after he left office in September 1987.
The meetings in 1987 between Mr Paircéir and Mr Dunne were not disclosed by Mr Paircéir or Mr Dunne to the McCracken tribunal, which sat in 1997 and heard evidence from Mr Dunne concerning a March 1988 meeting he had with Mr Paircéir's successor, Philip Curran.
Ms O'Brien said Mr Paircéir had told the tribunal, in a statement of intended evidence, that he did not view a request from Mr Haughey that he meet Mr Dunne as a representation or submission on behalf of Dunnes Stores. He had been asked in a letter from the McCracken tribunal in 1997 if any such representations or submissions had been made to him during his period in office.
Ms O'Brien said Mr Dunne told the McCracken tribunal he had no previous meetings with the head of the Revenue, prior to his meeting with Mr Curran.
The McCracken tribunal found the meeting with Mr Curran was merely a routine meeting.
Ms O'Brien said that a capital gains tax bill of £38.8 million raised against the Dunne family trust was appealed to the Appeal Commissioners by the trust. The commissioners ruled against the Revenue in November 1988, and on the advice of senior counsel the matter was not appealed to the High Court by the Revenue.
A separate tax bill, a discretionary trust tax bill, was raised against the trust in September 1986. The matter went to the Appeal Commissioners in March 1987, but on the day of the hearing a reduced tax bill was agreed following discussions between both sides. Mr Paircéir authorised the deal for the Revenue.
A £3.564 million payment was subsequently made by the trust. Interest totalling £62,000 that had arisen on the tax bill in the period between the agreement and the actual payment was waived following direct contact between Mr Paircéir and Noel Fox, a member of the Dunne family trust.
Mr Fox was the man contacted by the late Des Traynor in 1987 in relation to the possibility of payments to Mr Haughey by Mr Dunne. In the years following the approach, a total of approximately £1.9 million was paid to Mr Haughey by Mr Dunne, Ms O'Brien said. She said the total amount that has been identified as being paid to Mr Haughey, by various parties, is approximately £8.5 million.
Ms O'Brien said payments from Mr Dunne to Mr Haughey which had been discovered by the Moriarty tribunal and which had not been revealed to the McCracken tribunal meant the initial contact with Mr Fox by Mr Traynor must have occurred earlier than the McCracken tribunal had thought.
It had thought the approach occurred around November 1987, when many of the Dunnes tax dealings with the Revenue had been dealt with.
Ms O'Brien said Mr Fox attended a number of the meetings between Mr Paircéir and Mr Dunne.